Taking many factors into account together, with demand normalizing and fixed investment coming in, we estimate economic growth will reach 5 percent
Jakarta (Armfalcon.com) – DBS Bank Senior Economist Radhika Rao estimates Indonesia’s economic growth in 2023 will be around 5 percent on an annual basis.
“By considering many factors simultaneously, by normalizing demand and continuing investment coming in, we estimate economic growth will reach 5 percent,” Radhika said in an online media briefing monitored in Jakarta, Tuesday.
He said public consumption would return to normal and grow moderately this year, especially in the second half of 2023.
Investment will also continue to go into the mining, metal processing and transportation sectors, while the declining prices of Natural Resource (SDA) commodities are expected to weaken trade.
But at the same time, inflation in Indonesia is more controlled than inflation in other countries in the same region, especially the Philippines.
“We have seen inflation starting to moderate and that has allowed Bank Indonesia, which has been quite aggressive in its policy rate hike cycle, to hold its benchmark interest rate since February,” he said.
He estimates that the Bank Indonesia 7 Day Reverse Repo Rate will remain at 5.50 percent in May, and begin lowering in August or September 2023.
This is because inflation is expected to return to the government’s target range or below 3 percent on an annual basis in semester II-2023.
At the same time, the movement of the rupiah exchange rate is also predicted to be stable.
“For the current account balance, last year’s relatively large trade surplus was also enough to help support the current account balance which we estimate will still record a slight surplus this year, which will mark Indonesia’s third year of current account surplus,” he said.
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Reporter: Sanya Dinda Susanti
Editor: Ahmad Buchori
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